Microsoft paying YouTubers to mention Xbox One in their videos

Oft-noted for their 'innovative' marketing tactics, Microsoft has recently decided to broaden their horizons and enter into a new field: stealth marketing. According to recent reports, the company is offering YouTubers extra money to mention the Xbox One in their videos, and even more for including Xbox One gameplay footage.

According to a leaked copy of the legal agreement between Machinima and its partners, who generally produce gaming content for YouTube, the company offered an additional $3 per thousand video views to anyone who included at least 30 seconds of Xbox One gameplay footage, verbally mentioned that they were playing the Xbox One, and tagged their video with "XB1M13". For content producers, that's a pretty sweet deal - but there's no doubt about the validity of the backlash it has garnered thus far, especially considering the general reaction to product placement in pop culture.

The legal agreement also included a few more conditions: video creators must not "say anything negative or disparaging about the Xbox One or any of its games", and they must also keep the deal a secret, which means that they can't mention anything about it to their subscribers lest they not get paid.

While this type of promotion may mark the beginning of a sort of 'dark age' of marketing, as it becomes more and more difficult to distinguish between paid advertising and genuine content, Microsoft doesn't seem to be relying on it as a primary aspect of its Xbox One promotion. 

Despite this questionable element of the Xbox One's marketing, the company's promotional activities seem to be doing the trick so far nonetheless. The console has already reached many sales milestones, including the announcement of over 3 million consoles sold, and recent news that the Xbox One led in sales in the US during the month of December over its PS4 rival, selling 908,000 units. 

Source: ArsTechnicaImage via NeoGaf

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It's kinda interesting how the timing of this story lines up suspiciously well with neowins ever increasing aggression towards any posts that aren't heavily pro microsoft. Makes ya wonder if they're giving ms fansites bonuses for quashing negativity as well.

Not sure about US but this practice isn't legal under UK law. Rules 2.3 "Marketing communications must not falsely claim or imply that the marketer is acting as a consumer" and 2.4 "Marketers and publishers must make clear that advertorials are marketing communications".

SO many youtube videos end with "if you like this video be sure to signup/buy/subscribe to/etc (i.e. Audible). YouTubers will not pass up any chance to make extra money. Period. Not a big deal if you ask me. Clever, even.

I don't mind the checks at all, free money as far as I'm concerned. I'd do the same for the PS4 too if they offered.

Problematically, they also require the reviewer not to disclose that they're getting paid (or mention anything negative), which breaks FTC disclosure rules

How low can Microsoft go? Definitely getting desperate.

Edited by Steven P., Jan 21 2014, 2:53pm :

stevan said,

How low can Microsoft go? Definitely getting desperate.


So it's desperate for Apple and other companies to pay to have their products in movies? It's desperate when EA pays IGN and PCGamer to give their games higher reviews?

Here's a simple truth, everyone does it. If it's MS being desperate then so are other companies. You think Sony doesn't pay for sponsored advertisements?

Apple doesn't pay. Look it up. Having their products all over the screen is not the same as paying for only positive reviews and breaking FTC rules...

stevan said,
Apple doesn't pay. Look it up. Having their products all over the screen is not the same as paying for only positive reviews and breaking FTC rules...

What about the other companies I mentioned? You don't think game companies pay some reviewers for positive reviews? No that doesn't happen at all. If it's not paying directly with cash, then it's paying with freebies and other niceties to make the reviewer give them a more favorable score.

Same thing at the end of the day.

-Razorfold said,

What about the other companies I mentioned? You don't think game companies pay some reviewers for positive reviews? No that doesn't happen at all. If it's not paying directly with cash, then it's paying with freebies and other niceties to make the reviewer give them a more favorable score.

Same thing at the end of the day.

Of course other companies pay for positive reviews. And when they do the media reports on it and they get scrutinized.

stevan said,

Of course other companies pay for positive reviews. And when they do the media reports on it and they get scrutinized.

If they get caught. But it can't be desperate when everyone does it? Pretty sure Sony does, it, so then Nintendo, so does EA, so does Activision and a billion other companies.

-Razorfold said,

If they get caught. But it can't be desperate when everyone does it? Pretty sure Sony does, it, so then Nintendo, so does EA, so does Activision and a billion other companies.

Seriously? So because all major players in the industry do it all of a sudden it's ok? It's never ok to pay for reviews, no matter which company does it. It creates very biased reviews that can be far from the truth.

stevan said,

Seriously? So because all major players in the industry do it all of a sudden it's ok? It's never ok to pay for reviews, no matter which company does it. It creates very biased reviews that can be far from the truth.


Did I say it was ok? No I did not. I find it stupid just like you do.

However I was pointing out that isn't desperate that Microsoft is doing it because everyone does it. If MS was the only one doing it then yes it would be desperate.

-Razorfold said,

Did I say it was ok? No I did not. I find it stupid just like you do.

However I was pointing out that isn't desperate that Microsoft is doing it because everyone does it. If MS was the only one doing it then yes it would be desperate.

I agree, you're right. But Microsoft has been in the negative spotlight for a long time now. What bothers me is that they don't learn from their mistakes and continue to do things that garner negativity from the media.

stevan said,

I agree, you're right. But Microsoft has been in the negative spotlight for a long time now. What bothers me is that they don't learn from their mistakes and continue to do things that garner negativity from the media.


I agree but try and see it from their point of view. In an ideal world companies would be criticized equally, but we don't live in that world. MS and Google could do exactly the same shady thing and people on the internet will usually go after MS for it and "forget" that Google did anything wrong. Part of it could be that for a long time MS was "the bad guy" due to all the lawsuits they had in the 90s, and that sticks with people.

I mean look at this article:

"While this type of promotion may mark the beginning of a sort of 'dark age' of marketing, as it becomes more and more difficult to distinguish between paid advertising and genuine content"

It's not the beginning of anything and it isn't anything new because it's being going on for years now. Just this time it was MS who got caught.

Wall-swe said,
And how is this different from Apple, when they pay to have their hardware in TV series and Movies?

Unfortunately, every one does that, including MS. Have you seen Agents of SHIELD and Arrow, Surface Pro and Windows Phone are all over that show.

That being said, there is nothing wrong with this little advert that you get paid for $3 for mentioning Xbox One. In fact, it is clever plan - the YouTuber get to do all the work, and MS pays them.

"Apple won't pay to have their products featured, but they are more than willing to hand out an endless amount of computers, iPads and iPhones," said Gavin Polone, producer of HBO's Curb Your Enthusiasm. "It's kind of a graft situation."

Apple's products have long been featured in movies and television shows, despite Apple's claims that the company does not pay for such placements. The company does, however, provide free devices for product placement, and Apple's popularity and design aesthetic have led many films and shows to take advantage of such offers.

Providing hardware free of charge is not the same as actually paying. Don't see Microsoft giving anyone free Xbox Ones

So Apple claims that they dont pay, and that makes it true?
When you see the Apple logo, Apple has paid. When you dont see the logo they havent paid. Easy enough to understand.

stevan said,

Providing hardware free of charge is not the same as actually paying. Don't see Microsoft giving anyone free Xbox Ones

Stevan, it really doesn't matter, it is still a form of payment. The difference is that when Apple product are shown in movies and TV shows, the director doesn't need to tell the actor that he / she has to make sure that the logo is showing or holding it correctly because Apple product is very distinct, and people are very much aware how it works; thus Apple can just provide them with the product as their form of payment.

Now if MS is in the same boat, then MS will do the same thing and people will recognized their devices right away. However, in this situation, MS has to sponsor the a show or conduct product placement that requires the actor to promote the item in the actual scene.

"they must also keep the deal a secret, which means that they can't mention anything about it to their subscribers lest they not get paid."

They should consider putting that tv show 'Lie to me' on the XBL network.

Whoa, whoa, whoa. Back the **** up for a second. Microsoft advertising is 'desperate'? Practically all popular Youtubers have some sort of sponser, this is simply Microsoft putting out that if they like the product, they could also make some money from it. You know who probably won't take up this offer? Those that don't actually like the damn product.

Sometimes I feel people like to bash MS for the sake of having someone to bash. Ignoring all facts or reality. I'd also hazard a guess those who are claiming 'desperate' are also the ones who claimed the the Kinect is a super secret spying device that watches your every moment, despite carrying around a smartphone and having a built in laptop camera for years.

If you want to bash anything, at least have the courtesy to have a decent reason for it.

Geezy said,
The weird part is that people cannot mention they got paid for it. How is that not at least a little shady?

How is that different to other people on YouTube? a lot of them have sponsored video clips / product placement and never mention they are getting paid, although its pretty obvious they will be.

InsaneNutter said,

How is that different to other people on YouTube? a lot of them have sponsored video clips / product placement and never mention they are getting paid, although its pretty obvious they will be.

yeah but it says sponsored by.. not in this case hence shady

Tom said,
Practically all popular Youtubers have some sort of sponser, this is simply Microsoft putting out that if they like the product, they could also make some money from it.

Microsoft should pay forum posters, too, if they aren't doing so already.

Tom said,
Whoa, whoa, whoa. Back the **** up for a second. Microsoft advertising is 'desperate'? Practically all popular Youtubers have some sort of sponser, this is simply Microsoft putting out that if they like the product, they could also make some money from it. You know who probably won't take up this offer? Those that don't actually like the damn product.

The key difference is knowing whether that person is sponsored. You're rather oversimplifying the argument, as no one has said that Microsoft couldn't or shouldn't advertise.

Nah it's not desperate, it's product placement, and close to free Xbox advertisement. If you understand how it works then you'll understand that it's quite clever actually.